Sunday, March 24, 2013

After an extremely volatile week where the market gapped up or down each and every day and followed those gaps up with several reversals, we have a slightly shortened holiday week of trading ahead of us that will hopefully present better opportunities to make money than last week's mess did. I stayed out of it for the most part, making only a few trades and staying mostly in cash. My market timing score was bouncing around all week and when that happens, it usually means the money making opportunities are few and far between.

A Real Mess - Nasdaq Intraday

When you look at the major indexes, even with the Cyprus situation, this looks like a consolidation period. Last week was very volatile, but in the end, the action seems constructive. The twenty day EMA has yet to be broken on either the S&P or Nasdaq, and until it does, the bulls look like they have the edge from a technical perspective. A close below that twenty day (which sits right around 3220 as of now on the Nasdaq and around 1542 on S&P) would certainly change the outlook. On the flip side, any potential breakout attempt from the bulls must take us above 3259 and 1563 respectively, preferably in a convincing manner on heavier volume. No more of this "let's take us just above the breakout level and then sit there doing nothing" like we've seen a lot this year.

S&P 500

Nasdaq

Some names I am watching this week on the long side are shown below. I only have one long position and will likely sell that on any strength. As has been my plan the past few weeks, if I am lucky to get any of these setups to work, I will likely take profits on them rather quickly. I still don't see this to be a swing trader's market. I keep hoping things will change, but up to this point (at least for me), taking quicker profits and selling into breakouts is the only way to make some money, rather than giving positions room to move higher and then inevitably just watch them give the gains back late in the same session or during the following session.

ABBV

AMBA

ANGI

ASIA

ONXX

NFLX

ROVI

STR

WBMD

SPLK

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Good luck in the week ahead. Although it sometimes seems impossible that volume can get any lower than it is, it's certainly a good possibility later in the week with the holiday, so be careful for whipsaws, reversals, and other random algorithmic fun. Take care.

Tuesday, March 12, 2013

The market keeps chugging along and while I still believe that under the surface, trading and making money has been much harder than people want to admit, the overall indices show no signs of putting in any sort of top. I continue to struggle personally as I get stopped out of positions intraday on reversal spikes down and all sorts of what seems to be manufactured volatility (MLNX was the most recent as of four days ago), but as a trader, you will have periods like that where nothing seems to go right. I am strictly day-trading and taking profits quickly because I haven't had any luck with anything else, but I am still hopeful that I can find some nice swing setups that can be held for more than a day and act well enough that I won't be prematurely stopped out of them.

In that vain, I am focusing on five main stocks here. If someone asked to me name the leading stocks in this market, these are the ones that would immediately pop into my head. All trade more than a million shares on average and all are over at least $10. I believe all of them have had recent earnings releases as catalysts, which is always a plus. As long as these names hold up and show no signs of distribution (and as of now they don't), I remain optimistic about this market going forward. If these start breaking down, then you need to be much more careful with what you do.

In no particular order, here are the "tells" going forward....

KKD

LNKD

CREE

NFLX

SNTS

All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Other names I am watching that are a little thinner in terms of volume as potential "leading" stocks include FIVE, NKTR, INFI, WDAY, and NVDQ. These names are setting up here as well. If they can breakout and hold, it would also bode well for this market going forward.

Sunday, March 3, 2013

What a week. What a mess. Trading last week was literally all over the place and we pretty much saw everything. Gap ups, gap downs, reversals, late selloffs - you name it, it was present. In terms of swing trading, the chaos made things very difficult, especially coming off of a very significant breakdown the previous week, but day-traders had to be loving it. This year has been one where having a full-time has made things much more difficult than usual, at least for me. Ugh.

Friday's session was especially active, and I think it will set the tone for what to expect for the rest of this week and going forward. All the major indices had technical breakdowns on 2/20 and 2/21, but the fifty day moving averages have held so we are kind of in no-man's land as of now. I think the market is a little confused here and the trading last week showed that. I made some notes on the chart below and I am looking at the numbers listed as being very important. A break above or below those levels should be significant.

My market timing score has been at -1 for the past three sessions, which basically means the market has a slightly bearish outlook but that the best place to be is cash because the bears are not totally in control. That's how I am looking at the week ahead. I only have one long position going into next week and unless we get some clarity from the market early in the week, I will continue to find it hard to be aggressive either short or long. I don't care which way we go, but right now, the problem is that we are not going anywhere.

I have included some names I will be watching on both the long and short side of the market for the week ahead, along with the notes I made in TC2000 (which include trigger levels and average volume numbers). I can't remember the last time I posted a bunch of short setups, but I did see some this weekend, so I have to go with it and watch them for possible triggers. (Please click on the pictures below for a better view of each chart.)

Potential Long Setups

Potential Short Setups with Notes

Charts and Notes from TC2000, Courtesy of Worden Brothers, Inc.

Overall, because of the volatility of last week, I will not be surprised if the bulls break us to new highs this week but also not shocked if the bears completely break this thing down. More than likely, they continue to fight each other and the market chops around like it did last week, but we'll have to wait and see what happens. Stay open-minded (ready to go on either side) but disciplined (don't force moves if the market isn't ready to go). If the market does trade like it did last week, staying in cash or sticking to day-trades is the best option. Good luck.

Overall Market Timing Score

March 20, 2014 -2March 19, 2014 +1(Max Score +6, Min Score -6)

The Market Timing Score has six factors that I record on a daily basis. These include breadth indicators, moving average indicators, accumulation and distribution indicators, and overbought and oversold indicators.

The max score of the Market Timing Score is +6, but this is very rare. Typically a score of +4 or +5 tells you that the market is very bullish. A score of +3 or +2 tells you that the market is bullish, but there are a few reasons for concern. A score of +1 or 0 tells you that cash is the best place to be. The scores work the exact same way on the negative side for bearish markets.

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Chart Swing Trader is a website intended for the education of online stock traders. The website is an information service only. The information provided herein is not to be construed as recommendations to buy or sell stocks of any kind. They are simply the opinions of the author. It is possible that the editor of this blog may own, buy, or sell stocks presented. All investors should consult a qualified professional before trading any stock. The author is not an investment advisor. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts made by the author are committed at the reader's own risk, financial or otherwise.